Mining[edit]
Obsolete bitcoin mining hardware common in early and mid-2013. Called USB Erupter, each can calculate 333 megahashes per second.
Maintaining the block chain is called mining, and those who do are rewarded with newly created bitcoins and transaction fees.[23] Miners may be located anywhere in the world; they process payments by verifying each transaction as valid and adding it to the block chain.[23] As of 2014 payment processing is rewarded with 25 newly created bitcoins per block added to the block chain. To claim the reward, a special transaction called a coinbase is included with the processed payments.[21] All bitcoins in circulation can be traced back to such coinbase transactions. The bitcoin protocol specifies that the reward for adding a block will be halved approximately every four years. Eventually, the reward will be removed entirely when an arbitrary limit of 21 million bitcoins is reached c. 2140, and transaction processing will then be rewarded by transaction fees solely.[24] Paying a transaction fee is optional, but may speed up confirmation of the transaction.[25] Payers have an incentive to include such fees because doing so means their transaction will likely be added to the block chain sooner; miners can choose which transactions to process[12] and prefer to include those that pay fees.
As of 2013 mining has become quite competitive, and the process has been compared to an arms race as ever more specialized technology is utilized. The most efficient mining hardware makes use of custom designed application-specific integrated circuits, which outperform general purpose CPUs and use less power as well.[26] Without access to these purpose built machines, a bitcoin miner is unlikely to earn enough to even cover the cost of the electricity used in his or her efforts